Apax Partners Said to Abandon $8.3 Billion Offer for Cleaning Company ISS

Apax Partners LLP dropped a 6.4 billion-euro ($8.3 billion) bid for ISS A/S, the biggest by a European private equity firm since the credit crisis, after the owners of the world’s largest cleaning-service provider said the offer was too low, said two people with knowledge of the talks.

Goldman Sachs Capital Partners and EQT Partners AB, ISS’s owners, told Apax this month they wouldn’t pursue talks after the value of ISS’s publicly traded competitors jumped making an initial public offering more attractive, said the people, who declined to be identified because the talks were private. ISS isn’t holding talks with other bidders and is now preparing for an IPO, one of the people said.

The purchase would have been the biggest by a private equity firm in Europe since the collapse of Lehman Brothers Holdings Inc. brought dealmaking to a near-halt in September 2008, according to data compiled by Bloomberg. EQT and Goldman Sachs, which acquired ISS for 21.9 billion kroner ($3.9 billion) in 2005, said in August they were considering a sale of the company and hired bankers to review their options.

In December, Apax was given about two months to arrange financing for its offer, people with knowledge of the matter said at the time.

Officials at Goldman Sachs and Apax in London, as well as ISS, declined to comment on the talks today. A spokesman for EQT didn’t return a telephone call.

Finance Director

ISS would prefer to go public over other options, Jakob Stausholm, ISS’s finance director, told Copenhagen-based newspaper Borsen today. An IPO would give ISS owners a share in future growth, the newspaper said, citing him.

ISS’s publicly traded competitors have gained since the Apax approached the Danish company. Chertsey, England-based Compass Group Plc jumped 8.7 percent since Nov. 1 while Issy- les-Moulineaux, France-based Sodexo advanced 11 percent.

Apax oversees an 11.2 billion-euro fund raised in 2007. Leveraged buyout firms such as Apax pool money from investors to take over companies, financing their purchases mostly with debt, with the intention of selling them later for a profit.

To contact the reporters on this story: Christian Wienberg at cwienberg@bloomberg.net; Anne-Sylvaine Chassany in London at achassany@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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